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London Borough of Camden Wards: All Report Title LONDON BOROUGH OF CAMDEN WARDS: ALL REPORT TITLE Camden’s Financial Strategy 2015-2018 (FIN/2014/17) REPORT OF Cabinet Member for Finance and Technology Policy FOR SUBMISSION TO DATE Resources and Corporate Performance Scrutiny 16th December 2014 Committee Culture and Environment Scrutiny Committee 16th December 2014 Housing Scrutiny Committee 16th December 2014 Health and Adult Social Care Scrutiny Committee 16th December 2014 Children Schools and Families Scrutiny Committee 16th December 2014 th Cabinet 17 December 2014 SUMMARY OF REPORT Continuing reductions to core government funding and unavoidable demographic pressures mean that the Council is projecting a £70m deficit by 2017/18. This report sets out a series of proposals that, when considered alongside the actions agreed by Cabinet in September, are designed to enable Camden to take the action necessary to address the deficit, set a balanced budget for 2015/16 in March, and to prepare balanced budgets for the subsequent two years 2016/17 and 2017/18. The proposals constitute the most significant package of measures the Cabinet has considered since 2010. They are based on a rigorous assessment of how the activities of the Council meet the Investment Tests set out in the September report, to tackle inequality, focus on outcomes, invest in early intervention, and make every pound count. They have been informed by the comprehensive engagement process that the Council has undertaken with residents in Camden. They have been developed to ensure that the resources the Council will continue to invest in local services and communities in Camden deliver the priority outcomes in the Camden Plan in an efficient and effective way. Many of the proposals will have a significant impact on the way many services are delivered; this will affect both service users and the staff delivering those services. We have considered whether proposals will have an impact on equalities and where we think they might have carried out impact assessments to ensure that the reductions do not unfairly impact on particular groups and that mitigating measures are put in place to offset impacts. For those proposals which will require consultation and/or further equality impact assessments to be considered, whilst the associated budget reductions are being decided now, the final decision on whether and how to implement those specific savings will be made at a later date through delegation to relevant Directors or through a further decision by Cabinet. There are also some proposals which are ready for immediate implementation. The exact decision being sought for each proposal is set out in section 6.3-6.4 and Table 2. The report also updates the Cabinet on the detailed work needed to prepare the budget for 2015/16, fees and charges proposals for 2015/16, funding required for unavoidable pressures and use of Council earmarked reserves. Local Government Act 1972 – Access to Information No documents required to be listed were used in the writing of this report. Contact Officer Neil Simcock Acting Head of Strategic Finance Unit Finance Department 5 Pancras Square Telephone 020 7974 6740 Email [email protected] WHAT DECISIONS ARE BEING ASKED FOR? The Scrutiny Committees are asked to consider the report and forward any comments to the Cabinet. The Cabinet is recommended to: (a) Note the forecast deficit over the period 2015/16 to 2017/18 as set out in paragraphs 4.1-4.6 (b) Agree the proposals with associated budget reductions and increases in investments set out in Table 2 and Appendix A and agree the delegations sought for each project as specified paragraph 6.3 and in Appendix A (c) Note the impact of the proposals on the Council’s forecast deficit for 2015- 2018 set out in Table 2 and section 5. (d) Pursuant to delegations agreed in September, note the adjustments to savings in a number of projects agreed in September and the impact of those previously agreed by Cabinet set out in Table 1 (e) Note the need for further savings proposals and the ongoing work in developing additional saving initiatives set out in section 6.11-6.12 and Table 3, which it is intended to bring to Cabinet for approval in December 2015. (f) Approve the capital investment of £4m to provide additional early education/childcare places for disadvantaged Two Year Olds set out in paragraphs 5.31-5.32 (g) Note and approve officers’ intention as set out in paragraph 5.77 to seek authority for approval to proceed with a statutory consultation on the implementation of a Late Night Levy (h) Note the pay and inflation assumption in paragraphs 7.1-7.3 (i) Note the provisional allocations for Unavoidable Pressures for the 2015/16 budget outlined in paragraphs 7.4-7.5 and Appendix C (j) In relation to Fees and Charges in paragraphs 7.6-7.8: a. Delegate authority to Chief Officers to decide increases in existing fees and charges up to a maximum of 5%, in consultation with the relevant portfolio holders. b. Note the particular content in Appendix E setting out supporting information for the fees and charges rises above 5% for current fees and charges shown in appendix G and agree the specific amounts shown in Appendix G. c. Agree the new fees and charges shown in Appendix F. (k) Note the projected underspend on General Fund revenue budgets of £3.9m in 2014/15 in paragraph 7.9. (l) Agree to allocate the one-off 2014/15 budget savings of £3.6m towards HS2 (£0.8m) and capital investment related to childcare places for disadvantaged two-year-olds (£2.8m) discussed in paragraphs 7.10 (m) Agree to the reallocation of surplus reserve balances discussed in paragraphs 7.14-7.16 and Appendix D Approved by the Director of Finance. Date: 8th December 2014 CONTENTS EXECUTIVE SUMMARY OF CAMDEN’S FINANCIAL STRATEGY 2015-2018 1.0 WHAT IS THIS REPORT ABOUT? 2.0 WHY IS THIS REPORT NECESSARY? 3.0 OPTIONS 4.0 THE FINANCIAL DEFICIT 5.0 CAMDEN’S FINANCIAL STRATEGY RESPONSE from paragraph Approach and Focus ................................................................................ 5.1 Measuring the Impacts on More Vulnerable Groups .............................. 5.10 We Cannot Make Decisions Alone ......................................................... 5.15 Ensuring Value for Money ...................................................................... 5.21 Supporting Children and Families .......................................................... 5.26 Schools, Jobs and Economic Growth ..................................................... 5.39 Supporting Adults and Reducing Health Inequality ................................ 5.51 Homes and the Local Environment......................................................... 5.58 Investing in Culture and Community Services ........................................ 5.66 Increasing the Council’s Income ............................................................. 5.79 6.0 SAVING PROPOSALS - 2015/16 to 2017/18 Update on Savings Agreed in September ................................................ 6.1 Savings Proposed in this Report .............................................................. 6.2 Equality Impact Assessments ................................................................... 6.9 Planning for Further Cuts ....................................................................... 6.11 Next Steps and Updates ......................................................................... 6.13 7.0 2015/16 BUDGET UPDATE Pay Settlement ......................................................................................... 7.1 Inflation Rates .......................................................................................... 7.3 Unavoidable Pressures ............................................................................ 7.4 Fees and Charges 2015/16 ...................................................................... 7.6 Financial Outturn Forecast: Month 7 (October) ........................................ 7.9 Council Tax Base Update ....................................................................... 7.13 Review of Earmarked Reserves ............................................................. 7.14 8.0 WHAT ARE THE KEY IMPACTS / RISKS? HOW WILL THEY BE ADDRESSED? Government Funding Reductions and Business Rates ............................ 8.1 Implementing the Financial Strategy ........................................................ 8.5 Changes to Adult Social Care .................................................................. 8.9 Risks within the Capital Strategy ............................................................ 8.15 9.0 WHAT ACTIONS WILL BE TAKEN AND WHEN FOLLOWING THE DECISION AND HOW WILL THIS BE MONITORED? 10.0 CONCLUSION AND NEXT STEPS 11.0 LINKS TO THE CAMDEN PLAN OBJECTIVES 12.0 CONSULTATION 13.0 LEGAL IMPLICATIONS 14.0 RESOURCE IMPLICATIONS 15.0 RESOURCES USED IN THE PREPARATION OF THIS REPORT Appendices A Proposed savings 2015/16 – 2017/18 B Resident engagement findings C 2015/16 unavoidable budget pressures D Review of earmarked reserves E Fees and charges supporting information F 2015/16 new fees and charges G 2015/16 fees and charges increasing over 5% EXECUTIVE SUMMARY OF CAMDEN’S FINANCIAL STRATEGY 2015-2018 Between 2010/11 and 2017/18 Camden’s grant funding from central government will have been halved whilst overall costs such as those arising from supporting an aging population have increased. This means that despite already saving over £93m over the last four years the Council is projecting a budget deficit of £70m by 2017/18. With such a reduction in budget the
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